It’s time for my NYC real estate review for 2023! Let’s take a look at whether or not my predictions panned out.
Reality: This one kinda, sorta panned out. The market returned to some of its typical seasonality, with sales showing an uptick from spring onward. But most of the “improvements” were quarter over quarter, and not on an annual basis. High interest rates – which got even higher in 2023 – continued to chill the market. And low inventory frustrated the buyers who remained in the market.
Reality: This prediction definitely came true. As interest rates trended higher, sellers were more reluctant to put their homes on the market. Why bother when they might struggle to find a new place and have to pay a much higher interest rate to boot? This made inventory in the borough very tight, especially for the most desirable property types. As a result, prices stayed pretty steady in the borough and even went up for some categories. But Brooklyn wasn’t immune to the impact of higher interest rates. The luxury segment in particular faced some headwinds. And buyers shifted to more affordable neighborhoods in South Brooklyn in order to compensate for higher costs.
Reality: Rents stayed at historic highs, but renters didn’t end up seeing the same inventory crunches that we saw in 2021 and 2022. So while things were still very competitive (and expensive), they didn’t have to move at such a breakneck pace to secure a spot. In fact, by the end of the year, inventory was at the highest level seen since August 2021. But it was still significantly below the number of available apartments in 2020 and early 2021. So while the rental market ended up being more normal, renters were certainly not in the driver’s seat to close out the year.
Reality: This one also only kinda, sorta came true. Interest rates did stabilize, but they did so at very high rates. Sellers finally adjusted their pricing in response to get deals done. And some buyers did decide to lock in some well priced deals. But overall, transactions were still pretty muted compared to the highs of 2021 and early 2022.
What does the future hold for 2024 in NYC real estate? Check out my latest post for my predictions for the new year!
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